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SPAR
Operational Structure
A voluntary trading group. Stores owned and run by SPAR members, supplied and serviced by regional Distribution
Centres, owned by SPAR SA
6 DC’s are owned and run by SPAR and provide leadership and expertise to retail members.
Each DC managed autonomously as a profit centre by an Executive Mgt team
Decisions made by Group Services do not have to be implemented at DC level
Spar do not own any stores!
Channel / Formats
SPAR Stores
Trading Brand
Positioning
Size / Ranging
Every day convenience, speed and freshness
Up to 600m2
Limited range of produce, bakery, fresh meat,
prepared and take-out foods
Neighbourhood and rural supermarket shopping
700m2 -1300m2 - Range of groceries backed by
fresh produce, in-store bakery, butchery, deli and
home meal replacement departments
Aggressively priced one-stop bulk shopping
1300m2 + : Full range of groceries and general
merchandise with service departments such as
produce, bakery, butchery, deli and meal solutions
Standalone liquor stores for SPAR members
120m2 + : Full range of liquor products
A one-stop retailer of building materials primarily on a
cash & carry basis supplying the building trade and
DIY customers
Basic building and hardware products
Store Distribution – South Africa
160
144
140
120
Botswana incl with N.Rand, Namibia incl with W.Cape
100
90
86
77
80
58
60
57
47
45
44
40
40
30
28
23
25
16
15
20
4
0
South Rand
North Rand
KWIKSPAR
Source : SPAR July 2009
KZN
Eastern Cape
SPAR
Western Cape
SUPERSPAR
Lowveld
16
Core competencies
A finely tuned logistics and distribution operation
Exceptional brand management and support capacity for members ensuring a
consistent message over a wide range of store formats and consumer markets
Brand appeal and consistent brand message across LSMs 1-10
Exceptional reach into SAs full range of markets (LSM 1-10) through the
flexibility built into the Retailer Member model
E.g. : SPAR Thohoyandou sells 5 tons of chicken feet a day
Ongoing store refurbishment/ modernisation programme (20% stores per year)
Group Financial Performance
Strong growth for the past three years with excellent performance at retail
The Group (R’million)
Group Turnover
Group % Turnover Growth
Gross Profit %
Operating Profit
Operating Profit Margin
CPIX (Average for the period)
FY2004
FY2005
FY2006
FY2007
FY2008
HFY2009
11,985
13,599
17,010
21,704
26,742
16,100
18.0%
13.5%
25.1%
27.6%
23.2%
24.5%
9.2%
8.8%
8.4%
8.2%
8.1%
7.9%
395
499
603
775
972
605.1
3.3%
3.6%
3.5%
3.5%
3.6%
3.8%
4.3%
3.9%
4.4%
5.8
10.4%
10.9%
*Note: CPIX was re-weighted at the end of 2008. 2009 figure is CPI
Actual gross margin declined by 0,2% attributed by SPAR to a change in the sales mix (DC sales versus
drop shipment), and the competitive trading environment
Strategic Drivers
1. The SPAR Brand :
“Good For You”
The Objective:
To make SPAR the first choice food store that appeals to all South Africans no matter where they live, what
ethnic group they belong to, their gender, their age or their spending power
• Young, modern and energetic.
• Focus on offering an unforgettable shopping experience
• The principle : Life is full of great moments and shopping at SPAR is one of them
Shopper Communication > Inside the Store
2. The Store Experience:
The Re-Mix Programme
The store remodel programme > ‘Re-Mix’ and ‘Let’s Entertain’ strategy
Target extension and modernisation of 20% of stores p.a
SUPERSPAR, Glenwood, KwaZulu Natal – Feb 09
129 stores in 2007 / 144 in 2008
Strategic Drivers
4. Private Label
SPAR driving Private Label very aggressively at the shop shelf and in consumer communication. A critical
means of improving SPAR trading margin!
Strategic Drivers
5. Convenience
Focus on high margin specialist service departments, fresh and HMR’s
Be aware of pressure on grocery allocation > store level contact critical
Strategic Drivers
6. Emerging Market
Continued drive into emerging markets with 105 emerging market stores to date
Growing at a significant rate > Greenfields territory, and not an easy win – SPAR model ideal
Strategic Drivers
7. Improved Operational Efficiencies : Distribution
R1bn spent in upgrading facilities ever last 3 years